Replies to post #54456 on Two Hands Corp (TWOH)

[jimr1717]

✅ Excellent! Mods please sticky

1800 Diagonal Lending LLC

On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.
Bearish

[jimr1717]

✅ 1800 Diagonal Lending LLC

On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.

[jimr1717]

✅ 1800 Diagonal Lending LLC
On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.

[jimr1717]

1800 Diagonal Lending LLC

On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.

[jimr1717]

✅ 1800 Diagonal Lending LLC
On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.

[Magnum7419]

Plaintiff: 1800 Diagonal Lending, LLC
Defendant: Cuentas, Inc.
Counter-Defendant: Curt Kramer and 1800 Diagonal Lending, LLC
Counter-Claimant: Cuentas, Inc.
Case Number: 1:2025cv21357
Filed: March 24, 2025
Court: U.S. District Court for the Southern District of Florida
Presiding Judge: Jose E Martinez
Nature of Suit: Other Statutory Actions
Cause of Action: 28 U.S.C. § 1332 Diversity-Notice of Removal
Jury Demanded By: Defendant
RSS RSS Track this Docket
Docket Report
This docket was last retrieved on May 12, 2025. A more recent docket listing may be available from PACER.

Date Filed Document Text
May 12, 2025 Filing 27 Transmittal Letter Sent with Certified Copy of Order of Remand to: 11th Judicial Circuit. State Court Case Number: 25-02385 CA 06 (ls)
May 12, 2025 Opinion or Order Filing 26 ORDER granting #10 Motion to Remand to State Court; Remanding Case to the Eleventh Judicial Circuit in and for Miami-Dade County; denying as moot #18 Motion to Strike #14 Answer to Complaint, Counterclaim ; denying as moot #24 Motion to Quash. Case is Closed. Signed by Judge Jose E. Martinez on 5/12/2025. See attached document for full details. (ls)
May 12, 2025 Opinion or Order Filing 25 PAPERLESS ORDER granting nunc pro tunc #22 Unopposed Motion for Extension of Time. Defendant Cuentas, Inc. may file a response to #10 Plaintiff's Motion to Remand. Signed by Judge Jose E. Martinez on 5/12/2025. (bbp)
May 9, 2025 Filing 24 Defendant's MOTION to Quash Subpoena and for Protective Order by Cuentas, Inc.. (Murphree, Gary)
May 2, 2025 Filing 23 RESPONSE in Opposition re #10 MOTION to Remand to State Court filed by Cuentas, Inc.. Replies due by 5/9/2025. (Murphree, Gary)
April 25, 2025 Filing 22 Defendant's MOTION for Extension of Time to respond to Plaintiff's Motion to Remand re #10 MOTION to Remand to State Court by Cuentas, Inc.. Responses due by 5/9/2025. (Murphree, Gary)
April 24, 2025 PARTIES ADDED: Counterclaim Defendant Curt Kramer added per DE #14 and #19 Notice of Entry of Parties Listed. The correction was made by the Clerk. It is not necessary to refile the document. (jc)
April 23, 2025 Filing 21 RESPONSE in Opposition re #18 MOTION to Strike #14 Answer to Complaint, Counterclaim filed by Cuentas, Inc.. Replies due by 4/30/2025. (Attachments: #1 Exhibit Exhibit A, #2 Exhibit Exhibit B)(Murphree, Gary)
April 9, 2025 Filing 20 Clerk's Notice to Filer re #19 Notice of Entry of Parties Listed into CM/ECF. Parties/Mediator Not Added; ERROR - The Filer failed to add all parties from the complaint/petition/removal, etc. or the mediator. Filer is instructed to file a Notice of Entry of Parties Listed into CM/ECF and add the additional parties/mediator. (drz)
April 9, 2025 Filing 19 Notice of Entry of Parties Listed on #14 Answer to Complaint, Counterclaim into CM/ECF. (Murphree, Gary)
April 9, 2025 Filing 18 MOTION to Strike #14 Answer to Complaint, Counterclaim by 1800 Diagonal Lending, LLC. Responses due by 4/23/2025. (Attachments: #1 Exhibit Notice of Recording, #2 Exhibit Order Execution)(Andre, Tony)
April 9, 2025 Filing 17 Clerk's Notice to Filer re #16 Notice of Entry of Parties Listed into CM/ECF. Parties/Mediator Not Added; ERROR - The Filer failed to add all parties from the complaint/petition/removal, etc. or the mediator. Filer is instructed to file a Notice of Entry of Parties Listed into CM/ECF and add the additional parties/mediator. (drz)
April 9, 2025 Filing 16 Notice of Entry of Parties Listed on #14 Answer to Complaint, Counterclaim into CM/ECF. (Murphree, Gary)
April 3, 2025 Filing 15 Clerk's Notice to Filer re #14 Answer to Complaint, Counterclaim. Parties Not Added; ERROR - The Filer failed to add the party from the complaint/petition/removal, etc. Filer is instructed to file a Notice of Entry of Parties Listed into CM/ECF and add the additional party. (ls)
April 3, 2025 Filing 14 Corrected ANSWER and Affirmative Defenses to Complaint and, COUNTERCLAIM against 1800 Diagonal Lending, LLC, by Cuentas, Inc.. (Attachments: #1 Exhibit, #2 Exhibit, #3 Exhibit, #4 Exhibit)(Murphree, Gary)
April 3, 2025 Filing 13 NOTICE of Striking #11 Answer to Complaint,, Counterclaim, filed by Cuentas, Inc. by Cuentas, Inc. (Murphree, Gary)
April 1, 2025 Filing 12 Clerk's Notice to Filer re #11 Answer to Complaint,, Counterclaim,. Document and Case Style Do Not Match; CORRECTIVE ACTION REQUIRED WITHIN 3 DAYS - The Filer must File a Notice of Striking, then refile the document with the correct case style and case number in the appropriate case. (ls)
March 31, 2025 Filing 11 [STRICKEN per DE #13 ] ANSWER and Affirmative Defenses to Complaint , COUNTERCLAIM against 1800 Diagonal Lending, LLC by Cuentas, Inc.. (Attachments: #1 Exhibit First Loan Documents, #2 Exhibit Second Loan Documents, #3 Exhibit Domestication VA Judgment, #4 Exhibit SEC v. Diagonal Complaint)(Murphree, Gary) Modified on 4/3/2025 (ls). (per DE #13)
March 30, 2025 Filing 10 MOTION to Remand to State Court by 1800 Diagonal Lending, LLC. (Andre, Tony)
March 30, 2025 Filing 9 NOTICE of Attorney Appearance by Tony Andre on behalf of 1800 Diagonal Lending, LLC. Attorney Tony Andre added to party 1800 Diagonal Lending, LLC(pty:pla). (Andre, Tony)
March 28, 2025 Filing 8 CLERK'S NOTICE re 7 PAPERLESS ORDER. I contacted the office of Gary Michael Murphree regarding ECF No. #1 on March 24, 2025. The complaint may be filed incorrectly, either as a Notice of Removal or as a Registration of Foreign Judgment. To Filer, please note that the Southern District of Florida - District Court does not record Circuit Court 11th Judicial judgments (re: Abstract of Judgment - Fairfax Circuit Court). (jc)
March 28, 2025 Opinion or Order Filing 7 PAPERLESS ORDER. The Clerk is hereby DIRECTED to reclassify this case as miscellaneous. Signed by Judge Jose E. Martinez on 3/28/2025. (bbp)
March 25, 2025 Filing 6 NOTICE State Court Filings by Cuentas, Inc. re #1 Notice of Removal (State Court Complaint), (Attachments: #1 State Court Filings) (Murphree, Gary)
March 25, 2025 Filing 5 NOTICE Civil Cover Sheet by Cuentas, Inc. (Attachments: #1 Civil Cover Sheet Civil Cover Sheet) (Murphree, Gary)
March 25, 2025 Filing 4 Clerk's Notice to Filer re: Electronic Case. State Court Records not included. Filer is instructed to file a Notice (Other) with the State Court Records attached within 24 hours. (ksr)
March 25, 2025 Filing 3 Clerk's Notice to Filer re: Electronic Case. No Civil Cover Sheet. Filer is instructed to file a Notice (Other) with the Civil Cover Sheet attached within 24 hours of the notice. (ksr)
March 24, 2025 Filing 2 Clerks Notice of Judge Assignment to Judge Jose E. Martinez. Pursuant to 28 USC 636(c), the parties are hereby notified that the U.S. Magistrate Judge Eduardo I. Sanchez is available to handle any or all proceedings in this case. If agreed, parties should complete and file the Consent form found on our website. It is not necessary to file a document indicating lack of consent. (ksr)
March 24, 2025 Filing 1 NOTICE OF REMOVAL (STATE COURT COMPLAINT - Notice of Recording of Foreign Judgment) Filing fee $ 405.00 receipt number AFLSDC-18309778, filed by Cuentas, Inc.. (Attachments: #1 Exhibit Composite A Underlying Summons and Court Documents)(Murphree, Gary) Modified on 3/25/2025 (ksr). No Motion to Dismiss/Answer Filed

[jimr1717]

✅ 1800 Diagonal Lending LLC
On April 16, 2025 the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (“Holder”) relating to the issuance and sale of a Convertible Note (the “Note”) with an original principal amount of $94,300 less original issue discount of $12,300 and transaction costs of $7,000 bearing an 10% annual interest rate and maturing February 1, 2026 for $75,000 in cash. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the lowest closing bid price during the 10 trading days prior to the conversion date. Additionally, the Holder of the Note is entitled to deduct $1,500 from the conversion amount in each note conversion to cover the holder’s deposit fees associated with the conversion. The Company may prepay the Note in cash, if repaid within 90 days of date of issue, at 115% of the original principal amount plus interest, between 91 days and 150 days at 120% of the original principal amount plus interest and between 151 days and 180 days at 125% of the original principal amount plus interest.






"Kramer is a recidivist violator of federal securities laws, having twice agreed, on a no-admit "

"Recently, the Securities and Exchange Commission filed a complaint against Curt Kramer and three companies owned by Kramer, 1800 Diagonal Lending [color=red][/color]Company, LLC, Power Up Lending Group, Ltd., and Geneva Roth Remark Holdings, Inc. (Securities and Exchange Commission v. Power Up Lending Ltd., et al., No. 1:24-cv-03498). The SEC alleges that Kramer, by making convertible loans to microcap companies through 1800 Diagonal, Power Up and Geneva Roth, acted as a securities dealer without having the required securities licenses. To understand the case, and its ramifications, we first need to understand how these loans work"

https://kjk.com/2024/06/20/sec-brings-action-against-convertible-debt-lender/
Why Did the SEC Pursue Kramer?
Kramer and his companies aren’t the only ones offering convertible debt to small publicly traded companies. In the complaint, the SEC referred to Kramer as a “two-time recidivist violator of the federal securities laws,” but there appear to be some other reasons why the SEC is pursuing Kramer. In our experience, most of these convertible loans are only convertible if the borrower defaults, meaning that if the borrower repays the loan on time, then the lender does not have the right to convert the loan. For these loans, the conversion right is similar to a type of security that protects the lender — if the borrower is unable to pay, the lender converts and sells shares until the loan is considered repaid. However, most of Kramer’s loans were convertible after six months, regardless of whether the loan was in default, and some were converted in full before they were due (the six-month waiting period complies with SEC Rule 144, which allows a borrower to treat the shares as having been paid for when the loan was made, and freely sell them into the market after six months have elapsed without registration). In these cases, Kramer wasn’t protecting himself when a borrower couldn’t repay a loan. Instead, it appears he made the loans with the intent to convert at a discount and profit by selling the shares in the market. And profit he did. According to the complaint, from January 2018 to March 2023, Kramer’s companies made at least $60 million selling converted shares in the market after investing in approximately 325 issuers in nearly 2,000 transactions and converting loans into more than 90 billion newly-issued shares of common stock.